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'Russia out of Russia': For the elite, Dubai is a port during the war

2023-03-14T15:18:38.001Z


In the exclusive neighborhoods and palatial shopping malls of the United Arab Emirates' largest city, wealthy Russians can build a new life without having to cut ties with their home country.


DUBAI, United Arab Emirates - On an artificial island on the edge of the Persian Gulf, Dima Tutkov feels safe.

There are none of the anti-Russian attitudes you hear about in Europe.

He hasn't noticed potholes or homelessness, unlike what he saw in Los Angeles.

Fountains at the Pointe of the Palm Jumeirah luxury island.

(Andrea DiCenzo/The New York Times)

And even though his ad agency makes big profits in Russia, he doesn't have to worry about being recruited to fight in the Ukraine.

"Dubai is much freer, in every way," she says, wearing a designer T-shirt with intricate rips at a newly opened cafe in the city, where her children now study at a British school.

"We are independent of Russia," he said.

"This is very important".

Dmitri Balakirev, far right, who says he left Russia because he opposes the war and founded Inside Realty, an agency in Dubai's Media City offices.

(Andrea DiCenzo/The New York Times)

One year after Russia's historic onslaught of economic sanctions for its invasion of Ukraine, Russia's rich are still rich.

And in

Dubai

, the largest city in the United Arab Emirates, they have found their wartime port.

A bottle of Dom Pérignon, priced at around $1,200, is served to patrons at Chalet Berezka, a Russian restaurant and nightclub in a Palm Jumeirah development, Dubai, United Arab Emirates.

(Andrea DiCenzo/The New York Times)

Between the city's boardwalks, palatial shopping malls, and suburban cul-de-sacs, Russian is becoming the

lingua franca.

The oligarchs meet in exclusive complexes.

Restaurateurs from Moscow and St. Petersburg are competing to open there.

Entrepreneurs like Tutkov run their Russian businesses from Dubai and open new ones.

Diaspora

Dubai's new Russian diaspora spans a spectrum that includes

sanctioned

billionaires and middle-class tech workers who fled President

Vladimir Putin's project.

Aerial view of the artificial island called Palm Jumeirah, which has some of the most coveted real estate in Dubai (United Arab Emirates).

(Andrea DiCenzo/The New York Times)

But, to a certain extent, they share the same reasons for being in the Emirates:

The Emirates has maintained direct flights to Russia, has remained neutral in the Ukraine war and, they say, does not show the

hostility

towards the Russians that they perceive in Europe.

"Why do business in a place where they are not friendly to you?" says Tamara Bigaeva, who recently opened a two-story branch of a Russian beauty clinic that is already welcoming long-standing clients.

"In Europe, it's clear they

don't want to see us

."

In fact, one of the main attractions of Dubai is that it is apolitical, according to interviews with Russians who have settled there.

Performers at Chalet Berezka, a Russian restaurant and nightclub in a Palm Jumeirah housing development, Dubai, United Arab Emirates.

(Andrea DiCenzo/The New York Times)

Unlike in Western Europe, there are no publicly displayed Ukrainian flags or solidarity rallies.

The war itself seems to be a long way off.

Anatoly Kamenskikh, a Russian real estate salesperson for luxury developer Sobha, in Dubai, (Andrea DiCenzo/The New York Times)

In any case, anyone harboring anti-Russian sentiments in Dubai is most likely keeping it to themselves;

protests in the authoritarian monarchy of the Emirates are illegal and freedom of assembly is severely limited.

The presence of wealthy Russians in Dubai at a time when they have been largely cut off from the West shows how Putin has been able to maintain the social contract that is key to his domestic support:

In exchange for loyalty, those close to power can amass enormous wealth.

Manicure services at the Russian beauty chain Sugar in the Marina district of Dubai.

(Andrea DiCenzo/The New York Times)

In fact, a political scientist, Ekaterina Schulmann, claimed that Putin has been sending signals to businessmen that he is willing to remove even more obstacles to enrichment.

A recent law, for example, frees legislators from having to make their income and property public.

"Yes, we have cut you off from the First World, but things are not going to get any worse for you," Schulmann said, describing how he sees Putin's revised contract with the elite.

"First, there are many other countries that are friends with us. Second, they will have many opportunities to enrich you even more, and we will no longer persecute you for corruption."

Publicly, Putin has been calling on Russia's jet-setting elites to reorient their lives and investments within Russia.

Tamara Bigaeva, who has just opened a two-story branch of a Russian beauty clinic that already welcomes longtime Russian clients, in Dubai's exclusive Jumeirah neighborhood.

(Andrea DiCenzo/The New York Times)

But the rich who have moved to Dubai have

other ideas

.

"For all of us, this is an island of security for a while," said Anatoly Kamenskikh, a Russian real estate salesman who boasts that his team sold $300 million worth of properties in Dubai last year

-

the vast majority to Russian citizens.

"Everybody tries to invest their assets somewhere."

Kamenskikh's property developer, Sobha Realty, celebrated Dubai's Russian-fueled property boom by installing a miniature St. Basil's Cathedral and artificial snow outside the sales office.

A part of the man-made island called the Palm Jumeirah is packed with Russian restaurants and nightclubs, one of which was packed on a Wednesday night when guests ordered $1,200 bottles of Dom Pérignon champagne, which the dancers

served

with lit flares.

When a drunk customer yelled:

Dima Tutkov, owner of an advertising agency in Russia and founder of the Angel Cakes cafe, at the Bluewaters Island location in Dubai.

(Andrea DiCenzo/The New York Times)

"Glory to Ukraine!" The goalkeepers promptly sent him off.

"You have the feeling that they have their heads in the sand," said Dmytro Kotelenets, a Ukrainian entertainment producer who moved to Dubai with his family, referring to the Russians around him.

"Either they don't want to notice what's going on between Russia and Ukraine, or they think nothing has changed."

In his state of the nation address last month, Putin called on Russia's rich to "stand with their Motherland" and bring their financial assets home, rather than seeing Russia "simply as a

source of income

"from abroad.

Aerial view of the skyline and Marina district of Dubai, United Arab Emirates.

(Andrea DiCenzo/The New York Times)

Indeed, many of Russia's wealthy are moving to the United Arab Emirates, which, like the rest of the Middle East, has refused to join the European Union.

styles

"I'm in Dubai, I'm relaxing," reads the lyrics of the current number 1 song in Russia, according to Apple Music.

"Yes, I am rich and I do not hide it."

The Emirates has a population of about 10 million, of whom only one million are Emirati citizens.

The rest are

expatriates

, including millions of Indians and Pakistanis, and smaller numbers of Europeans and Americans.

Interior of the Marina Mall in Dubai, United Arab Emirates.

(Andrea DiCenzo/The New York Times)

An analysis of flight logs by The New York Times last spring revealed that the United Arab Emirates became the top destination for private flights leaving Russia in the weeks after the invasion, which began on February 24, 2022.

Since then, the country's appeal has only grown.

Russian government statistics show that Russians made 1.2 million trips to the Emirates in 2022, compared with 1 million in the year before the 2019 pandemic.

Many of those visitors put down roots:

Russians were the top non-resident buyers of property in Dubai in 2022 by nationality, according to Betterhomes, a Dubai agency.

First, there are the tycoons.

Andrey Melnichenko, a Russian coal and fertilizer billionaire, moved to the United Arab Emirates last year after sanctions forced him to leave his former residence in

Switzerland.

Last month, in the quiet lobby of an exclusive resort, another sanctioned Russian businessman said he was in town for a birthday party.

A shopping area in the Deira district of Dubai.

(Andrea DiCenzo/The New York Times)

Russian officials and their families also come to visit, though they try to avoid drawing attention to their presence, and for good reason:

In Russia's northwestern Vologda region, the pro-Kremlin United Russia party expelled two local lawmakers after social media posts placed them in Dubai.

One of them, Russian journalists studying their publications reported, was vacationing there with

Ksenia Shoigu

, the daughter of the Russian Defense Minister.

The elite cross paths at Angel Cakes, an Instagrammable cafe that advertising entrepreneur Tutkov opened on an artificial island called Bluewaters, in the shadow of the world's tallest Ferris wheel.

A regular customer of the cafeteria, the former president of a major Russian company, quipped:

"Dubai is becoming a part of Russia outside of Russia."

Tutkov dismissed as "illusionary" the idea that sanctions have wrecked the Russian economy.

His ad agency, he said, is profiting from the rush by companies to fill the void left by Western corporations pulling out of Russia.

Among its clients is Haier, a Chinese home appliance manufacturer trying to break into a market hitherto dominated by more established brands.

Sobha Hartland, a luxury development project from developer Sobha, in Dubai.

(Andrea DiCenzo/The New York Times)

Sanctions on the financial system have not been an obstacle either.

Last summer, the ruble hit all-time highs against the dollar.

Tutkov said he took advantage of the exchange rate by using unsanctioned Russian banks to move part of his advertising agency's profits to Dubai.

"We would change to dollars and transfer them here," he said.

"In dollars, we were making colossal excess profits, you know? And everybody was doing it."

Tutkov and his family had planned to spend the summer in Moscow.

But after Putin's project last fall, he is no longer sure that he will return.

"These are colossal risks," says Tutkov, 39.

"What if you can't leave or they take you to the army or something?"

The diaspora also includes those who earn less, including art world types, tech workers and employees of Western companies who have moved their offices from Moscow to the city.

Dmitri Balakirev, who worked in technology in the Urals, left Russia because he was opposed to the war, he said, and went to Dubai because he had visited it before thanks to

direct flights

from his city.

Balakirev decided to stay and set up a real estate agency.

He thought it was likely that there would still be direct flights to Russia, allowing him to keep in touch with his relatives.

And he saw it as a place where he could earn a living.

Emirati officials claim that their banks follow all the rules related to US sanctions.

In fact, many Russian expats say one of the hardest things about moving to Dubai is opening a bank account, attributing the months-long waits to the banks' demanding compliance requirements.

"There are many Russians who have not been sanctioned and are interested in safer havens," Anwar Gargash, a diplomatic adviser to the Emirati president, told reporters last year.

Among those who found refuge in Dubai last year was Russian pop star Daria Zoteyeva, the singer of Russia's current No. 1 hit.

Now he lives in an unfinished luxury development in the desert.

At night, a light show illuminates the Burj Khalifa, the world's tallest skyscraper, in the distance.

look also

The West tried to isolate Russia.

didn't work

How Russia's oligarchs circumvent sanctions a year after the invasion of Ukraine

Source: clarin

All news articles on 2023-03-14

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